International Real Estate
I'm currently in Seoul and wondering if there are others as well, if so let's connect
Even for other US citizens traveling abroad, I'm curious to hear stories of your experiences you found to be new, exciting, interesting and how they are different from the US
For example, I stumbled across a term here called 전세 ( Jeonse) that is unique to S. Korea. It refers to the way apartments are leased. Rather than a monthly payment, the tenant will make a lump sum payment equal to 60-90% of the market value, depending on where you are. Overall, now that interest rates are low, they trend more on the high side
The tenant then get's to live there where their monthly expense is usually just the utilities (or monthly payment to the bank for borrowing the money for the large "deposit" or a portion of it). The landlord gets to invest the deposit money and keep all the interest earned from it. The tenant is protected by having a "lien" on the property
During these times of lower interest rate, 월세 (Wolse) is also used because the owner makes a higher return than other investments, which is like the traditional monthly rent with the deposit around 10% of market value. Then there are hybrids in between with a larger "deposit" and lower monthly payment (which for the tenant could mean a lower overall monthly payments even with a bank loan taken out for the deposit)
When asked around about why they don't just buy the apartment, people just said it was the Korean way. Others have said there's some tax implications when you own multiple properties. There was a sense that the younger generation is fearing a housing bubble as real estate prices keep rising so fast
I guess will will see as household debt here keeps rising and when interest rates start to go up. Something to think about for you speculative and cash flow investors out there. What are your thoughts?
Any interesting stories from other places around the world?